June 22, 2007

China may phase out corn-based ethanol production
 

China may phase out corn-based ethanol production by no longer approving such activity, and possibly turn entirely to other raw materials such as cassava, sweet potatoes and cellulose to produce the bio-fuel, the National Development and Reform Commission (NDRC) said.

With a total annual production capacity of 1.02 million tonnes of ethanol, China's four main corn-based ethanol producers would be asked to gradually switch to using alternative raw materials, NDRC added.

The Chinese government's move is seen as a positive step for domestic bio-fuel producers, due to currently high corn-based ethanol production costs in China. Additionally, reduced bio-fuel demand for corn should check or stop the rise in prices of the crop, which would in turn bring down animal feed costs for livestock farmers.